Theft of Businesses Key Intangible Assets by Insiders

First, facts and realities...on two occasions (November, 2007, April, 2008) I coordinated-secured meetings with an extraordinary group of highly specialized and focused researchers employed at the Department of Defense’ Personnel Security Research Center, or PERSEREC headquartered in Monterrey, California on the topic of insider theft of proprietary information. https://kpstrat.com/wp-admin/post.php?post=207

The primary purpose of these meetings were to…discuss PERSEREC’s projective, descriptive, and on-going research and findings insofar as ‘insider adversaries and insider originated espionage’. https://kpstrat.com/wp-admin/post.php?post=261

Collectively, the study’s findings…through my lens, having devoted many years to investigatory research and study on this and related matters, presented significant implications to both the government and private sectors.

The questions I posed to the study’s principal investigators…focused on, what I believed were the immediate relevance of this study’s findings and their potentially significant effect on U.S. private sector companies, insofar as how each elects to..

frame their discussions, debates, and fiduciary responsibilities, should they find this horizontal study has relevance to their company’s future sustainability, i.e., the types of transactions considered – engaged, the nature of the intellectual, structural, and relationship capital and intellectual properties involved, employee hires, whom they may elect to transact business, and how they may enact policies, procedures, and practices in concert with the study’s findings without disturbing – disrupting the increasingly sensitive issues associated with business globalization.

There are nine indicators (findings) in the study...that describe specific (projected) challenges related to insiders which the principal investigators agree, are not likely to diminish or otherwise be muted, for the foreseeable future, e.g.,

1. The internet has facilitated the presence of large, efficient, and global marketplaces for sellers, seekers, and buyers of safeguarded, proprietary, and classified information can exchange same with relative anonymity – immunity.

2. Employee awareness about the value and competitive advantages produced by proprietary information assets has elevated, in no small part, because they recognize it can be sold for a profit.

3. Fewer employees are deterred by a traditional sense of loyalty (to their employer)…

4. There are growing numbers of employees who (a.) retain emotional, ethnic, and financial ties to other countries, and are, (b.) less (personally) inclined to seek U.S. citizenship, which is (c.) fostered by technologies which enable at will global (personal) communication.

5. Employees are less inclined to (a.) view espionage – theft of information assets to be morally wrong, instead, (b.)they may view such acts as being (morally) justifiable, if (c.) they feel that sharing such information will benefit (d.) the world community, and/or (e.) prevent armed conflict.

6. Internationalization of science and commerce is placing more employees in positions to (a.) establish and maintain contact with individuals in other countries, who have (b.) specific interests in exploiting the employee’s knowledge, i.e., the intellectual, structural, and relationship capital they posses.

7. There is an inclination by those engaged in multinational trade and business transactions to regard unauthorized transfer of proprietary information assets and technology as (a.) business matters, rather than (b.) acts of betrayal or treason.

8. There is a growing allegiance by employees to (a.) a global community, and (b.) an increasing acceptance of global as well as national values.

9. Tendency by employees to view human society as (a.) an evolving system of ethnically and ideologically diverse and interdependent persons and groups, which (b.) may make illicit acts less challenging to (personally) rationalize.

These findings, in my judgement, prompt many additional questions about any companies’ vulnerabilities to the ‘insider threat’…aside from the dramatic rise in the number known ‘global computer hacking events’. For example, I suspect, in light of these findings, we are variously obliged to re-assess the following…

1. Employee reactions to the elevated intensity and frequency which external entities are targeting (soliciting) their company and their knowledge?

How, or if, these findings affect U.S. companies, obviously by now…have been tested many times over and on many levels. To be sure, there are many who would, and perhaps should, make reasonable arguments that the findings of the PERSEREC study represent a quite natural (inevitable) consequence of more societies – peoples being globally connected and actively communicative.

There is an economic reality that already has, and will likely continue to influence how these findings ultimately play out for companies…which is, 80+% of most company’s value and sources of revenue lie in – emerge directly from intangible (non-physical) assets, not tangible (physical) assets. The ‘intangibility’ of company’s most valuable and competitive assets in the context of PERSEREC’s findings, my experiences suggest, have produced adverse impacts. If, for no other reason than, it is far less challenging to steal, infringe, misappropriate intangibles than tangibles. Precisely how or if PERSEREC’s findings coincide with that reality is certainly worthy of further discussion and comment here.

Again, proper arguments could variously be made to support or not support…some or all of the findings in terms of their potential and gravity. Respecting either argument, all are obliged to recognize the economic fact – business reality cited above. And that readers, warrants our discussion and comment.

Ultimately, the multitude of issues presented within these findings, insofar as their impact…on U.S. companies have, and in all likelihood, will become more acute, requiring specialized familiarity, experiences, and skill sets to effectively address in corporate policy contexts.

Please Note: Having thoroughly engaged the principle investigators of this study, initially by phone in late 2005, and again (personally) in 2007 and 2008 at PERSEREC headquarters, long before the current administration entered the White House, there is absolutely no possibility the findings would, even remotely, appear similar to remarks uttered – perspectives held by individuals appointed to this administration. It would truly be a disservice to this study’s principle investigators, and the findings, to assume otherwise!